FTC alleges Amazon illegally made $20 billion by rigging billions of ad auctions
FTC says firm replaces actual ad-auction results "with higher prices set by Amazon."
The Federal Trade Commission and 22 states have filed a lawsuit against Amazon, alleging that the company has engaged in a clandestine scheme overcharging advertisers for a period of seven years. According to the lawsuit, from 2019 onwards, Amazon Inc. covertly manipulated the auction process used to determine the pricing of ads on its platform.
The company allegedly represented, and advertisers presumed, that competitive auctions dictated the prices for ads on its renowned e-commerce website. However, the truth is that Amazon overrides and substitutes the genuine auction outcomes with higher prices set by Amazon itself, aiming to boost its profits. The Federal Trade Commission (FTC) disclosed that it obtained internal documents and messages, which revealed how Amazon secretly inflated auction prices for Sponsored Products, Sponsored Brands, and Sponsored Display advertisements that are displayed alongside search results viewed by consumers when they seek information about a product. The FTC's investigation commenced in 2024.
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